The primary driver is Technology. Advances in digital storage and printing led Xerox to create the Book-in-Time Copier. This copier is able to print a full 300 page book in under a minute at the costs of $6.90.

E-commerce sites like Amazon used the Web to change the means of book distribution. Leveraging their cheaper infrastructure costs, E-commerce companies competed directly with traditional Brick and Mortar companies on price. Product offerings from E-commerce companies were often 20-30% less than Brick and Mortar companies.

Spread of the WebSpread of the Web

Digital RevolutionDigital Revolution

* Assume book not returned

* Assume wholesaler = 3% market share

This is the value chain for a small order of books (long-tail phase)